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Highlights
- Crude oil prices tumbled on Tuesday.
- The prices extended their last week's decline as Russia is showing signs of its willingness to have a substantive negotiation over Ukraine.
- The global commodity market is facing headwinds since Russia started Ukraine's invasion on 24 February 2022.
On Monday, crude oil prices tumbled more than 5% to reach the lowest level in the last two weeks boosting hopes for progress towards a diplomatic end to the Russia-Ukraine tussle. At the same time, a surge in new coronavirus cases in China provoked a travel ban in the region and cast doubt on demand.
The prices extended their last week's decline as Russia is showing signs of its willingness to have a substantive negotiation over Ukraine.
The global commodity market is facing headwinds since Russia started Ukraine’s invasion on 24 February 2022. Russia is one of the leading producers of commodities in the world and the Western sanctions on Russia have created a global supply concern. The prices of both the oil benchmarks dropped more than 4.8% in the last week after reaching a record high-level last Monday.
On Tuesday, May delivery Brent Crude oil futures further declined and last traded at US$102.66 per barrel down 3.16, while April delivery WTI crude oil futures exchanged hands at US$98.70 per barrel, down 4.19% at 12:26 PM AEDT. This is the lowest level, last seen on 1 March 2022.
Both crude oil benchmarks surged more than 30% so far this year since Russia started Ukraine’s invasion.
Also Read: Crude oil surges to 14-year highs on delays in Iranian talks
Source: EODHD/Others Eikon
Source: EODHD/Others Eikon
Russia-Ukraine negotiations
On Monday, Russia and Ukraine delegations held the fourth round of talk through a video link but no new progress was announced. Ukraine said that it held the talks with Russia on ceasefire, security guarantee, immediate withdrawal of troops despite a fatal shelling of a residential building in Kyiv.
Must Watch: As Russia-Ukraine War Intensifies, Commodities Also Soars
Amid the Russian oil embargo, the country’s oil and gas condensate output rose to 11.12 Mbpd so far in March. Last week, the US has banned Russian oil imports and Britain also said to phase them out by the end of 2022.
Furthermore, a north-eastern Chinese province imposed a rare travel ban due to the Omicron outbreak in the region.
Meanwhile, Russia is urging India to boost its investment in the Russian oil and gas sector and expressed its interest in expanding the sales network of Russian companies in India.
Also Read: Crude oil slides from multi-year highs as Iran talks rev up
Bottom Line
Crude oil prices dropped significantly on Monday boosting hopes for progress towards a diplomatic end to the Russia-Ukraine tussle. The global commodity market is facing headwinds since Russia started Ukraine’s invasion on 24 February 2022.
Here’s how commodities performed in the last week click here